a balanced mutual fund is aimed at investors who want course hero

by Braxton McClure PhD 8 min read

What is a mutual fund and how does it work?

One type of mutual fund does not endeavor to achieve the goals of a balance of bonds and stock or growth, income, and stability. Instead, it focuses on personal characteristics, such as age and risk tolerance, and your position in the financial life cycle. This is the

Can a mutual fund company change my goals to meet them?

A) The mutual fund company may attempt to change your goals to meet their fund offerings. B) You must provide the mutual fund company with your defined goals before they allow you to purchase shares. C) You must look for a mutual fund with the same or similar investment goals that you have in order to find an appropriate fund.

What is the current value of a mutual fund's holdings?

Suppose that the current value of all of a mutual fund's holdings is determined to be $750 million. The fund's liabilities are $125 million and it grew at 20% from last year. It currently has 45 million shares outstanding.

Who is the investment advisor for a mutual fund?

Each individual mutual fund hires an investment advisor, generally from the management company, who oversee the particular fund. How is this advisor paid? Which of the following is a benefit to investing in a mutual fund? A) Most small investors don't have the time, knowledge or desire to do the research necessary to purchase individual stocks.

How Do They Work?

Balanced funds work by taking a relatively large chunk of the investment and dividing it among many companies. That way, instead of worrying about multiple stocks, you only have to worry about one stock in order to get the same amount of money from your investments.

Why Should I Use Them?

A balanced fund offers the potential for capital appreciation and income while also providing stability by being less volatile than owning individual stocks.

How Much Money Will It Take To Invest In A Balanced Fund?

The amount of money you need to start investing in a balanced fund will depend on the particular fund and the fees that are associated with it.

Benefits Of Using A Balanced Fund

There are many benefits to using a balanced fund. Some of the benefits include:

Drawbacks Of Using A Balanced Fund

Fees: Many balanced funds charge fees, which can reduce the overall return on your investment.

The Bottom Line

Balanced funds offer investors a number of benefits, including risk reduction, diversification, and tax efficiency. They are an excellent option for investors who want to invest a small amount of money and still get the benefits of diversification.